Pension’s investment boosts jobs
Two downtown St. Louis projects — The Laurel and the Park Pacific — have $108 million in AFL-CIO financing, and are expected to generate 1,111 union jobs, according to a report from the AFL-CIO.
Ted Chandler, chief operating officer of the union’s $3.7 billion Housing Investment Trust, said Monday that the projects "offer an excellent return" and have the "collateral benefit" of providing construction jobs.
"There is a concentration of several exceptional projects in St. Louis that deserve kudos to business, labor, the construction industry and political leaders," Chandler said. "What we’re doing in St. Louis is part of the effort to create 10,000 construction jobs by early 2011."
Commercial construction felt the recession more severely than most of the economy. More than 700,000 construction jobs disappeared between March 2009 and March 2010, said the Housing Investment Trust report, citing Labor Department figures.
The 19 trust-financed projects in 15 cities should produce 5,000 union construction jobs, the report said. Additional projects under consideration for financing could lead to a total of 10,000 new jobs by early next year and millions of dollars in contributions to union pension funds, according to the report.
Chandler said a third St. Louis project is under review for financing. He declined to identify the project. Including those projects under review, financing would total nearly $1.3 billion.
In January, the union committed $63 million to the $98 million Park Pacific project, which includes 230 apartments the Lawrence Group is putting in the former Missouri Pacific railroad headquarters on 13th Street.
Two months later, the union decided to put $45 million into the $68 million apartment portion of The Laurel, the new name of the Dillard’s building on Washington Avenue.
Amos Harris, one of the developers, said union financing was critical to the project. The union tailored the agreement to allow one interest rate on the construction phase of the project and a lower rate for permanent financing, Harris said. As a result, the developers managed to "nip and tuck and tweak" the financing agreements to add as much as $5 million in cash for the project, he said.
Filed under: economics by Forest